Daily Market Trend Guide -- Wednesday, November 09, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets expectedly remained in the consolidation stage as it opened moderately positive, pared its gains, took support and recovered from its lows again to end the day with moderate gains and in the process have formed a lower top and lower bottom on the Daily High Low charts.

The Markets yesterday recovered from its lows and ended the day near the high point of the day, and thus technically speaking, they are expected to continue with its up move today, at least in the initial trade.

The above reading is further supported by global cues today and thus, we can fairly expect the Markets to open on a positive note today and look for directions while trading positive at least in the initial trade today. With the Markets expected to open positive, the levels of 5330 and 5355 shall act as resistance and the levels of 5350 and 5320 are likely to act as supports.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Charts is 60.5594 and is neutral as it shows no negative divergence or failure swings. The Daily MACD remains bullish as it continues to trade above its signal line.

On the Candles, A lower long shadow has occurred. This is typically a bullish signal when it occurs near a support level, which appears to be the case with NIFTY.

Apart from this, we have seen discomfort at lower levels in the Markets as it recovered from its lows yesterday, though on low volumes and in the end it also added Open Interest. This signifies that apart from short covering, some fresh longs have also been seen building up. Having said this, it also remains to be seen that the Markets moves past the falling trend line drawn from its highs of 6338 levels and poses resistance around 5330-5345 levels. Until this happens, we will continue to see range bounds movements which will be volatile and on low volumes. Further we have there-working day truncated week so this may keep the markets in range, while  undercurrent remains bullish. With intraday trajectory crucial, while avoiding shorts, cautious but positive outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in
+91-9825016331
milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com